How one fintech mobilized to help small businesses apply for emergency loans

Veem specializes in cross-border payments, but when small-business customers clamored for help this month with emergency SBA loans, the fintech responded.

San Francisco-based Veem used its digital payments platform to create the front end of a traditional bank processing SBA loan applications, dramatically reducing the bank's service bottleneck.

The solution was possible because of overlap between Veem’s typical cross-border payments processes and the data banks need from small businesses applying for SBA loans through the Paycheck Protection Program under the CARES Act, said Marwan Forzley, Veem’s CEO.

Veem was only one of several fintechs that worked with banks to pump out $349 billion in government funds to small businesses when PPP loans were first announced. Fundera, Lendio and Brex were others, while PayPal, Intuit's Quickbooks, Square and Kabbage were fintechs operating as approved PPP lenders.

“We started seeing a lot of questions from our customers about how to apply for PPP loans, and the wheels started turning,” Veem CEO Marwan Forzley said.

“We were able to plug PPP loan applications into Veem's flow fairly easily, because a core chunk of reporting for PPP loans is the same KYC and Know Your Business information we collect digitally for cross-border payments,” Forzley said.

Veem Capital, which fronts installment loans to Veem’s customers through a network of fintech banks, was another factor driving Veem's ability to help.

“Most of the mechanisms needed for streamlining the SBA loan applications were already part of our platform,” Forzley said.

Over the Easter weekend when banks were closed, Veem helped the bank it’s working with — an undisclosed preferred SBA lender — process thousands of loans, Forzley said.

The process ended when the government’s first wave of small-business loan funds ran out on April 16, two weeks after it launched. Congress is expected to approve adding another $310 billion to the program, and if so Veem will resume its loan-application work.

Many of the small businesses that applied for PPP loans through Veem were existing cross-border payments customers. Others were newcomers who heard about the service by word of mouth.

“We didn’t do any advertising but we had a tremendous number of companies asking for help as more heard about it,” Forzley said.

The first inkling Veem had that small businesses were seeking help came through its dashboard, where customers typically ask questions and make comments.

“We started seeing a lot of questions from our customers about how to apply for PPP loans, and the wheels started turning,” Forzley said.

Forzley assembled a team to engineer the service overnight and it was up and running within a couple of days.

Veem also created a tracking service so its PPP loan applicants can see the status of their applications.

Some of the small businesses that used Veem’s platform to apply for a PPP loan have already received funds, Forzley said. Others are still on hold, either pending SBA approval or waiting in the vast queue of SMBs seeking PPP loans.

“We haven’t seen any pattern around which types of companies’ SBA loans got approved or why — the data is all over the place,” Forzley said.

Veem, launched in 2014, is not Forzley's first startup. A former Nokia executive, Forzley in 2005 launched eBillme, which he sold to Western Union in 2011. Veem has raised about $70 million in venture capital funds over several rounds, including a $25 million infusion in 2018 from Goldman Sachs and Silicon Valley Bank, among others.

The coronavirus pandemic has changed the way many industries conduct business — and that's especially true of the legal cannabis industry, which was already struggling in the U.S. to find the best way to handle noncash payments.